Energy Price Freeze

Ian C. Lucas Excerpts

Wednesday 6th November 2013 Commons Chamber

[Caroline Flint]

My hon. Friend is absolutely right. There is a growing chorus of voices saying that something is wrong in the market and in what we are being told about rising costs leading companies to increase bills. It just does not add up. Research by the Institute for Public Policy Research has shown that efficiency savings alone could knock £70 off the average bill. To correct the overcharging that has happened in the past and give consumers some badly needed respite for the future, we propose to freeze prices for 20 months.

[Ian Lucas (Wrexham) (Lab)]

Is not there a good precedent for acting when there is a defect in the market? Did not the Conservative Government in 1981 impose a windfall tax on the banks when the market did not work and the banks themselves made a windfall?

[Caroline Flint]

My hon. Friend is right. I think that the former Prime Minister, Margaret Thatcher, also imposed a windfall tax on oil and gas. The truth is that when the market is not working it is important for Governments to step in, because failing markets do not provide competition or the security that people want from the energy sector. We all agree that these things, whether energy or water, are essential to life and that we all need them. In that situation, people expect Governments to step in and ensure that the market is fit for purpose.